Climate change, gender diversity and executive pay have all been making headlines throughout 2018.

Advisers' clients may sometimes feel a bit helpless about these issues, wondering if they can really make a difference when choosing funds and investments for their portfolios.

Especially when governments, in countries like the US, are are failing to address, nay denying altogether, some of the most important environmental, social and governance (ESG) issues.

"The asset management industry has undergone a significant shift over the last decade," observes Julia Dreblow, founder of sriServices and Fund EcoMarket. 

"ESG research and responsible ownership activity, although varying in terms of quantity and quality, are now effectively hygiene factors. And behind the scenes, the UK government (and the EU) are looking to work with investors in areas such as sustainable finance and social impact investment."

She continues: "New product launches, particularly those with sustainability themes and with a focus on ‘impact’ are accelerating - as is the growth in ethical/SRI discretionary portfolio managers and portfolio planning." 

This area of investment has seemed, at times, to be rather slow in translating to the mainstream. While there are some fund management groups which have only recently entered this space, many others have been offering these types of funds for years.

Amanda Tovey, investment manager and head of SRI at Whitechurch Securities, notes: "Generally, asset managers are increasing the pressure on companies around the areas of ESG through active engagement with company management, which is evidenced by the growing number of funds incorporating ESG analysis into their methodology.

"However, a large number have been doing this for years but are now perhaps advertising it more, as investor demand in this area increases."

This guide will look at the many factors driving investor demand, as well as how advisers can help clients build an ethical or sustainable portfolio of investments. It will also weigh up the pros and cons of taking an active versus passive investing approach and, finally, what themes investors can get exposure to.

This guide is worth an indicative 60 minutes of CPD.

Contributors to this guide: Hortense Bioy, director, passive strategies and sustainability research, manager research at Morningstar; Julia Dreblow, founder of sriServices and Fund EcoMarket; Perry Rudd, head of ethical research at Rathbone Greenbank Investments; Amanda Tovey, investment manager and head of SRI at Whitechurch Securities; Jason Hollands, managing director of business development and communication at Tilney Group; John David, head of investments at Rathbone Greenbank Investments; Christopher Greenwald, head of sustainable investment research and stewardship at UBS Asset Management; Brian Dennehy, managing director of FundExpert.co.uk and Dennehy Weller & Co; Bryn Jones and Noelle Cazalis, managers of the Rathbone Ethical Bond fund; David Harrison, manager of the Rathbone Global Sustainability fund; Joshua Kendall, ESG analyst at Insight Investment, part of BNY Mellon IM; Investment Association; Triodos Bank; HSBC Global Asset Management.

Ellie Duncan is features editor of FTAdviser and Financial Adviser